A search was carried out in case of assessee. Pursuant to search proceedings, block assessment order was passed making certain addition to assessee’s income. Penalty proceedings were also initiated separately. Tribunal allowed assessee’s appeal and addition made by AO was deleted. High court affirmed the order of Tribunal. On appeal to Supreme Court, the appeal of revenue was allowed and the addition made by the AO is affirmed. Supreme Court also directed to initiate dormant penalty proceedings. Assessee filed appeal contending that since penalty proceedings were initiated after expiry of prescribed period of six months from Tribunal’s order, same were barred by limitation under section 158BFA(3)(c) of the Act. Court held that appellate order passed by Tribunal got merged in order passed by Supreme Court dt. 2-05-208 (CIT v. S.Ajit Kunar ( 2018) 404 ITR 526 (SC) and, thus, dormant penalty proceedings which were reinitiated in pursuance of Supreme Court’s order, could not be regarded as barred by limitation. (BP. 1-4-1996 to 17-07-2002)
S. Ajit Kumar. v. ACIT (2019)419 ITR 260/ 266 Taxman 380/ 184 DTR 449 /(2020) 314 CTR 687(Mad.)(HC)
S. 158BFA : Block assessment–Penalty–Limitation-Pursuant to supreme Court’s order deciding quantum of appeal in favour of revenue–Dormant penalty proceedings were reinitiated–Order is not barred by limitation–Order of Tribunal was merged with the order of the Supreme Court. [S. 158BFA(3)(c), 253, 271(1)(c), 275]